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Mortgage Payment Formula:
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The Bankrate Home Loan Mortgage Calculator With Taxes helps homeowners and potential buyers estimate their total monthly mortgage payment by combining the principal payment with the monthly portion of property taxes. This provides a more comprehensive view of housing costs than principal-only calculations.
The calculator uses the formula:
Where:
Explanation: This calculation divides the annual property tax by 12 to determine the monthly tax portion, then adds it to the principal payment to determine the total monthly housing cost.
Details: Accurately estimating total monthly housing costs is essential for budgeting, loan qualification, and understanding the true cost of homeownership. Property taxes can significantly impact monthly expenses and should not be overlooked in financial planning.
Tips: Enter the principal payment amount (typically from your mortgage statement or loan estimate) and the annual property tax amount (available from your local tax assessor or property records). All values must be non-negative numbers.
Q1: What exactly is included in the principal payment?
A: The principal payment typically includes both the principal amount (the loan balance reduction) and the interest charged on the loan. It may also include mortgage insurance if applicable.
Q2: Are homeowners insurance costs included in this calculation?
A: No, this calculator specifically focuses on principal payment and property taxes. Homeowners insurance would be an additional cost that should be considered separately in your housing budget.
Q3: How often do property taxes change?
A: Property taxes can change annually based on local tax rates and property assessments. It's important to check with your local tax assessor for the most current rates.
Q4: Can property taxes be paid separately from the mortgage payment?
A: Yes, some homeowners choose to pay property taxes directly to their local government rather than through an escrow account with their mortgage lender.
Q5: What other costs should I consider when budgeting for a home?
A: Beyond principal, interest, and taxes, consider homeowners insurance, maintenance costs, utilities, HOA fees (if applicable), and potential special assessments.